Snapchat Has Been Faking Growth Numbers, Ex-Employee Alleges

A former Snapchat employee alleges that the company has been faking its growth numbers in order to boost its value in an IPO, according to a lawsuit filed in L.A. Superior Court.

Anthony Pompliano, who was the company’s growth lead, alleges that he was fired after just three weeks with the company because he refused to go along with Snapchat’s plans.

Pompliano was hired away from a similar job at Facebook, Snapchat’s arch-rival. According to the lawsuit, Pompliano came to understand that he was only hired because Snapchat wished to obtain confidential and proprietary information from Facebook.

He said he was fired after blowing the whistle on the company’s misrepresentations with several higher-ups.

“Snapchat’s leadership saw Mr. Pompliano as an impediment to their planned IPO because he refused to turn a blind eye to Snapchat’s misrepresentations,” the lawsuit alleges.

Pompliano also alleges that after he was fired, Snapchat set about smearing his reputation.

“His opportunities have been compromised significantly,” said Pompliano’s attorney, David Michaels. “He’s had difficulty securing employment. It would be a red flag to an employer that you were there for three weeks and were terminated. We believe when they make the inquiry to Snapchat, they hear a bunch of lies.”

Much of the suit is blacked out, including the specific metrics that Pompliano alleges were misrepresented. Michaels said the information was withheld pending a determination on whether it is covered by a confidentiality agreement. It is possible that that portion of the complaint — which appears to contain a detailed account of Pompliano’s brief tenure at Snapchat — could become public.

The lawsuit seeks an injunction barring Snapchat from harming Pompliano’s employment prospects, in addition to damages. Pompliano is also pursuing a wrongful termination claim through the arbitration process, in accordance with the terms of his contract.

Mary Ritti, a spokeswoman for Snap Inc., Snapchat’s corporate parent, said the suit is without merit.

“We’ve reviewed the complaint,” she said. “It has no merit. It is totally made up by a disgruntled former employee.”

This is alarming for investors, but not surprising at all. Because allegedly the same group of advisors that have been hyping up phoney or exaggerated user numbers for Snapchat are the same group of people in Hollywood who are also partly responsible for the recent over-hype of the fake technology by Magic Leap that’s recently been exposed in media too. It’s a bad trend by greedy people who seem to be unethical at any cost (see the lawsuit filed) if it’s true. I don’t see how Snapchat can continue with IPO because when lawsuit goes to Trial if the Plaintiff is proven correct, several execs and even Snapchat CEO could be found in violation of SEC Rules with serious legal consequences. Let’s see the UNREDACTED VERSION OF THIS LAWSUIT! Surely pages 9-17 COMPLETELY BLACKED OUT makes this the biggest (worst) tech story of year so far for Snapchat and Evan Spiegel. Some say it’s karma, let’s see, time will tell. The jury’s out so far and the lawsuit seems very credible for obvious reasons. Bad recruiting by Snapchat senior execs? Nah don’t think so. This one stinks from a mile away. Congrats to Mr. Pompliano for being so brave + bold.

First, Snap is in Los Angeles, not Silicon Valley. Second, this employees firing happened in September of 2015. Why file now? The first day of CES? Right before the IPO? Sounds like a disgruntled former employee trying to make a nuisance value settlement on an opportunistic lawsuit.

Sounds like the mormon church’s inflation of growth statistics. They actually do baptism of the dead, it’s so ridiculous. It’s like me saying that I have the largest fan club in the world, Ghenghis Khan and his entire army are members.

Snapchat’s higher-up saying the lawsuit “has no merit”, and is filed by a “disgruntled former employee”, automatically means that This Lawsuit Has Merit, and that Silicon Valley’s Snapchat is reflexively lying!

Snapchat actively pursues a Facebook manager and fires him within three weeks and claims his suit has no merit? I think Snap, Inc. may be putting their IPO on hold, as the investment community will want third party verification of the growth and other metrics.

As many times as Facebook, Twitter, and other social media have come forth with problems in the metrics on views for ad revenue, etc., any investor should be wary.

I’ll wait and see how it plays out. I think most companies are overly generous with numbers. Having worked in Silicon Valley for over 17 yrs., I have seen companies put out numbers that while valid I think some folks would find fault in the way they develop their metrics. Is an account really an account if someone hasn’t accessed it for 2 yrs? Some might say yes of course it is and others would say it isn’t. But is it a lie or fraud? No I don’t think so- so yeah I’ll wait and see the details and what the specific claim is before having a solid opinion.